The ICAP calls sales tax – which is 16% with an additional 3% value addition tax on commercial imports – a bottle-neck in letting people come within the tax net. DESIGN: ESSA MALIK
KARACHI: The Institute of Chartered Accountants of Pakistan (ICAP) demanded on Friday that the corporate tax rate for public and private companies in the country be brought down from 35% to 25%.
Presenting the institute’s proposals for the federal budget 2013-14, Saqib Masood, chairman of ICAP’s taxation committee said the present corporate tax rate in Pakistan was the highest in the region, as China has the corporate tax rate of 15% to 20% only.
Speaking on the occasion, Zaidi said one of the main obstacles he faces while serving in the government is the lack of credible data. “The data government officials use is mostly inaccurate, biased and incomplete. In fact, we have to read websites of the World Bank and International Monetary Fund (IMF) every morning in order to keep ourselves up-to-date with Pakistan’s economic data.”
Masood called for ending the discrimination between salaried and non-salaried persons by providing separate tax rates because it is against the ‘norms of personal taxation’. “It is very odd that where the income exceeds Rs2.5 million, a salaried person attracts the maximum tax rate of 20% compared to a non-salaried person, who attracts the maximum rate of 25%. This clearly indicates that the law itself admits that non-salaried persons understate their income.”
The ICAP also calls sales tax – which is 16% with an additional 3% value addition tax on commercial imports – a bottle-neck in letting people come within the tax net. Unlike many developing countries, Pakistan does not offer any substantial protection to its manufacturing/industrial sector and therefore businesses prefer to operate as traders and enjoy associated tax/duty benefits.
Published in The Express Tribune, April 13th, 2013.
Like Business on Facebook to stay informed and join in the conversation.
COMMENTS (3)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
We should not consider any comment or idea made by ICAP, because it is not an Accounting body but it is an "Accounting Mafia". We should always ignore ICAP in every field and i recommend all of us to boycott ICAP everywhere.
Problem in Pakistan is very small tax base,only 23,000 companies file tax returns and . Only about 5800 companies declare profit
We hope that new Chairman of FBR will take pragmatic steps to widen the tax base using third party data and bring in honest ethical officers as his senior team.
Do away with interest payments as tax deductible anyone?